As resale accelerates and AI tools help to refine shopping, does clothing rental still have a space in the secondhand era?
Rent the Runway recently struck a deal that will erase over $240 million in debt, hand over controlling shares to new investors, and give the company fresh breathing room. Under the agreement, it will retain about $120 million in indebtedness and receive a $20 million injection from Story3 Capital Partners, Nexus Capital Management, and Aranda.
The lenders will take roughly 86 percent ownership before factoring in management incentives and a rights offering. The company said the move allows it “several more years to repay $120 million in remaining borrowings,” and enables it to “invest in even more inventory” through expanded partnerships.
That restructuring arrives amid difficult fundamentals: the stock has fallen from record highs to as low as $3.77, shares have declined by two-thirds year over year, and revenue slipped 7.2 percent in the most recent quarter. Still, CEO Jennifer Hyman contends that “every single financial metric has substantially improved over last several years, and we were able to do that with shackles on,” and that the company had considered bankruptcy as one alternative.
As part of her turnaround, it has shifted from owning its inventory to an “asset-light” model in which brands supply goods for the platform and receive a share of rental revenue when items are used.
This move underscores the pressure on rental incumbents, but also the belief that the clothing rental concept still holds potential — if rethought.
The rental sector faces headwinds — and unexpected tailwinds
Although rental was once hailed as the future of fashion, its growth proves more disciplined than explosive. The global online clothing rental market is projected to climb from around $1.73 billion in 2024 to $1.91 billion by the end of this year. Some forecasts stretch that upside, projecting a rise from $2.60 billion in 2025 to $6.39 billion by 2035 at a 9.5 percent CAGR. Others are more conservative: one report pegs 2025’s market size at $1.89 billion, growing to $2.63 billion by 2030 at a 6.83 percent CAGR.
“Overall, we see a significant trend of people becoming very focused on the sustainability aspect of the way they consume,” Max Bittner, CEO of secondhand luxury platform Vestiaire Collective told McKinsey. “Consumers are realizing that the fashion industry is a major contributor to many ecological issues the planet is facing right now.
They’re also becoming aware that they can take concrete actions to counter the negative impact of fashion. By extending the life cycle of the products that you wear by nine months, you can help reduce the industry’s carbon emissions by 30 percent. By buying secondhand handbags instead of new ones, you can help reduce fashion’s carbon emissions by up to 90 percent. These realities are sinking in dramatically with consumers,” he said.
Rental still falls orders of magnitude below resale: the U.S. secondhand apparel market grew 14 percent in its last reported year, according to ThredUp — five times faster than the overall retail clothing market. Meanwhile, secondhand fashion globally grew 15 percent, hitting $227 billion — or roughly nine percent of total fashion sales. Some expect another 11 percent rise this year as resale now outpaces most other categories in scale, reach, and continues winning consumer mindshare.
That tension between resale’s dominance versus rental’s promise of freshness, defines the question: does clothing rental still have a place?
Peer-to-peer revival: Pickle and micro-renting
The next wave of rental is shifting from top-down, capital-intensive models toward peer-to-peer, on-demand, neighborhood rental. Pickle, the app that lets users rent or lend anything from wardrobes in their community, is emerging as a poster child for that shift. It offers same-day local delivery (in some markets), treating the closet similarly to an inventory asset.
Unlike subscription rental models, Pickle allows users to list items for days, weeks, or even rent a piece on very short notice. The Cut describes it as “the Airbnb, but for closets,” noting how users can schedule as soon as two hours ahead. The platform recently raised $12 million in a Series A, citing tens of thousands of active users across the U.S. Its founders calculate huge latent value in underused wardrobes, noting that most people wear only twenty percent of their closets eighty percent of the time.
Its financial stakes are real: top lenders on Pickle reportedly average $3,200 monthly in 2024, with some influencers pulling in five-figure months. The app takes a commission (20–35 percent, depending on channel), and rental pricing tends to be ten to 20 percent of retail. It positions itself not in competition with resale, but alongside it: one lends out the garment; the other sells it.
Pickle’s model evades the inventory carrying costs and logistics overhead that have burdened traditional rental companies. But quality control, damage disputes, and user trust remain friction points: one Redditor noted having two of 27 rented items returned “in less-than-ideal condition” and one lost, though she was ultimately compensated after intervention.
Smaller players highlight the same shift. Curtsy, which began life as a peer-to-peer rental app for dresses, now positions itself squarely as a resale marketplace. Its site bills the platform as “the #1 app to buy and sell women’s clothing, vintage, and designer,” and its user experience is optimized for listing, shipping, and payouts rather than rentals. That evolution underscores how difficult it is for rental-only platforms to sustain operations in a market where resale offers lower friction and fewer overhead costs. Curtsy’s trajectory proves the point: even companies born to facilitate renting are gravitating toward resale as the more stable business anchor.
How AI tools sharpen the resale edge and blur rental’s advantage
The latest pivot comes via Phia, a new AI shopping assistant launched in April 2025. Its browser extension and mobile app scan across 40,000 online shopping sites — from luxury retail to high-end resale platforms — analyzing pricing and labeling listings as high, fair, or typical. It also surfaces lower-priced matches from resale channels, tracks price drops, and computes resale value in real time. Since launch, it has amassed half a million users and struck over 5,000 brand partnerships.
By making resale easier and more transparent, Phia allows more consumers to feel confident when buying secondhand. It reduces the perceived risk in pre-owned purchase, narrowing a key advantage rental once held: discovery without commitment.
“We think the AI revolution is really going to disproportionately benefit resale and secondhand as compared to traditional retail,” Alon Rotem, chief strategy officer of ThredUp told Fashionista. With tighter pricing alignment, better condition indicators, and real-time comparisons, resale begins to function as a frictionless option, not just a value alternative.
Consumers today are also increasingly evaluating apparel not only for utility or style, but, critically, for its resale potential. Because AI tools make resale comparisons easier, shoppers can factor in residual value when making buying decisions. Smart buyers now view certain garments — limited editions, collaborations, viral pieces — as dual-purpose: wear, then monetize or offload.
That dynamic pressures rental to redefine its offering: renting for the few wears you want, rather than owning a speculative piece destined for the resale market. Rental’s appeal is now more about temporal access (a week, a day, a look) than portfolio management.
Where rental still holds an edge
While resale dominates daily or long-term fashion consumption, rental still shines in certain verticals, namely red carpet, weddings, and other high-aspiration events. Rental may hold the attention of fashion-forward consumers curious about trends but unwilling to commit to purchase. And for consumers seeking to keep their own inventory low, such as nomads or zero-waste enthusiasts, renting rather than purchasing still carries cultural cachet.
To survive, rental platforms are evolving hybrid models: brand partnerships where brands list stock on rental platforms (as Rent the Runway now does), or collaborations where resale and rental feed into one ecosystem. Hyman says her “primary action post this deal is doing even more deals with brand partners around the world.”
In the ideal hybrid, an item not rented might then be sold, or rotated into resale inventory. That reduces markdown loss and widens monetization.
What we see at the top
- The rental market persists but is unlikely to supplant resale as the core circular fashion driver.
- Rental’s high fixed cost — warehousing, cleaning, logistics — gives agility advantage to lean peer-to-peer models like Pickle.
- AI tools like Phia make resale safer, more accessible, and more transparent, encroaching on rental’s historical domain of “risk-free access.”
- Consumers now think with resale in mind: they buy not only to wear, but to resale, pushing rental into a secondary role of short-term access rather than ownership alternative.
Ultimately, the story isn’t that clothing rental is dead — it’s that its borders are dissolving. What started as an access experiment is being pulled deeper into resale gravity, pressured on one side by AI tools like Phia that dissolve friction and on the other by platforms born for renting now operating chiefly as resale marketplaces (as with Curtsy).
The most resilient rental models will be those that reimagine themselves as part of a continuum — where an item may pass from rental to resale, curating value at every turn. As Bittner put it: “Consumers will increasingly shun cheap clothes and favor preowned designer goods instead,” which signals that access may become the exception rather than the baseline.
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